March 20, 2013
Moba: building machines for growth
An eFeedLink Exclusive
Emerging market egg suppliers are demanding more efficient machines that can scale up while providing processing and product differentiation capabilities. With its world leading productivity, customised solutions and positioning as a "partner for profit," Moba's egg processing technology meets their needs.
by Geraldine EE
The world's largest manufacturer of egg grading and packing machines built its first machine in 1947 at Barneveld, the Netherlands. Moba was founded in Western Europe, the first region where cages are banned and traceability was required by law. Originating in a place that makes heavy regulatory demands, Moba clearly understood the challenges of egg producers faced with heavy investment for group housing, coupled with rising feed costs and at times less-than-ideal egg prices.
In the niche but highly competitive egg processing equipment industry, Moba's ability to find solutions to these challenges sets it apart from its competitors.
Putting the bottom-line at the top
Christoffer Ernst, Moba's sales director for Asia Pacific explains that, "Our approach is to ensure that our equipment gets as many eggs as possible into the pack. In fact, the industry has confirmed that we consistently get at least 2% more eggs into the pack, which translates to more profits for our customers." To put this in perspective, a 1% reduction in cracks means the customer can sell 1% more eggs, which could represent a US$100,000 to US$200,000 increase in annual revenue.
In addition, grading allows eggs to be selected for a certain output of the machine, thus allowing producers to produce multiple products with different qualities, to be sold at different prices. This helps producers to differentiate their products and also increases their profits.
According to Paul Buisman, Moba's global product manager, "The approach is not to reinvent the wheel. We have good machines and there are certain areas where we know are critical, so we keep on focusing to improve in those areas."
Thanks to decades of such ongoing, unending innovation, customers enjoy better egg processing efficiency and earn back their return on investment on Moba's machines within a fairly short time frame of one to two years. The end consumers, too, benefit from safer eggs due to the efficient traceability and analytical techniques built into Moba's equipment.
Building strength from egg handling weaknesses
Typically, the weak spots in egg handling are as follows: The loading of eggs on to the roller; transferring eggs from the roller to the transport mechanism; and getting the eggs into their packages. Moba has consistently managed to conquer all three of these 'weak spots' through innovative technology.
To reduce breakage during egg loading, Moba minimises speed differences in its machines. By minimising instances of rapid acceleration or deceleration, eggs can travel at the same speed as the rollers for a brief time, thereby reducing stress-induced breakages.
In transferring eggs into the machine, the use of multiple arms, instead of the conventional single arm makes the critical movement twice as efficient. Also, receiving eggs from the track into the pack is streamlined to only three transitions, with less equipment needed.
Although the above explanations are grounded in physics and engineering, in reality is that there is not one single 'magic trick' to obtain a high percentage of sellable eggs. Instead, Moba's technical advantage lies within the synergistic sum of many carefully engineered processing steps, of which keeping eggs separated is the most vital.
Once eggs are accumulated, they are kept separate in individual cups throughout further handling to avoid impacts which could lead to cracks. In addition, keeping eggs in their individual positions significantly reduces the possibility of cross contamination.
Developed for individual egg handling, these methods translate into the 'Gentle Touch'-a process of bringing the egg through the process as gently as possible-which soon became the trademark of Moba.
According to Buisman, the individual egg handling principle has been built into all its machines for many years. Each time Moba works on a new generation, it simply redesigns the weak spots and typically achieves an additional 0.2% to 0.3% reduction in cracks. Over decades, this yields large, cumulative efficiency gains and enables the company to maintain a technological lead over its competitors.
Individual Egg handling - the answer to bio-security
Besides squeezing out the last bit of yield and efficiency, and hence profits from egg processing machines, consumer concern about food safety issues has made bio-security a new buzzword among eggs producers these days. Essentially, achieving safe eggs boils down to traceability and hygiene.
Thanks to individual egg handling, Moba's machines are able to label, identify and track each individual egg and its movement. At the infeed, each egg is treated as one individual product and all data belonging to this single product including dirt, leak, crack and weight properties is recorded throughout the entire process. In fact, the computer knows the exact position of each individual egg.
Even if multiple houses or suppliers are processed simultaneously, this principle works per infeed batch. With Moba's machines, producers can handle offline batches of eggs from as many as 150 different suppliers coming in and as many as 250 different products going out. In a nutshell, Moba's development of the individual egg handling brought with it benefits of traceability and product administration. Without individual egg handling, traceability is almost impossible.
"I think we produce the only machines that can produce different qualities simultaneously, without making it very complicated for the operator. You just select two products in two lanes, and the rest goes automatically. It is simple, with the ability to do almost anything, it's totally flexible," says Buisman.
Undoubtedly, developing a computerised individual egg handling system takes a lot of time, commitment and resources. Ultimately, programming efficiency is the basis of this system's competency. With its product-oriented set-up, the Omnia database creates a link between the physical egg handling and processing logistics and the resulting information flows. Moba's machines can handle 2,000-3,000 eggs at any one time, keeping track of each egg as it moves through the machine within 20 milliseconds.
A recent example is Lakes Free Range Egg Company from the UK, which recently automated its operations. As one of the biggest suppliers of McDonald's in Britain and to UK supermarkets, the company requires very consistent egg quality. Consistent egg quality must be maintained, despite having many suppliers, some of which are small free-range farms supplying only 3,000 to 5,000 eggs per day. With hundreds of batches from many different farms going in and a wide variety of products coming out, combining automation with product consistency was obviously a challenge.
After the egg company installed the Omnia that produces 120,000 eggs per hour, it was able to process about a million eggs daily. More importantly, with full traceability, every egg that comes in is identified, captured in the system and tracked. With Moba's equipment, not only was Lakes Free Range Egg Company able to deliver consistent quality, it was able to integrate all the paperwork within the machine's database itself.
Though under-rated, the ability to clean the machines effectively also contributes to bio-security. Because eggs are moving through the machines every day, producers need to be able to clean the equipment quickly, so as to minimise downtime losses.
The Moba packer is built such that all parts that come in contact with eggs can be clicked out and disinfected. The whole packer consists of only a few elements made of industrial grade plastics. They can be easily washed while the machine continues running by using a spare set of identical parts. This is combined with a foamable and high pressure cleanable infeed.
Customers drive product design
Moba first turned its existing manual packers into fully-automatic egg-grading machines in 1962; and by 1970, Moba marketed the first automatically grader and packer.
During its 65 year history, Moba has been dealing with people, very often family enterprises which have been in the egg business for decades. Beyond customers, these people are in fact Moba's best advisors for future development, as they deal with egg processing, productivity and quality control issues on a daily basis.
The company soon learned that step by step, it would get the bigger picture if it were to combine technologies requested by customers into one project. The end result was a blueprint of the 'ideal egg packing station'.
"You get experience, you exchange ideas, you work prototypes out together with customers, proven technology, and that you combine into a sort of modular system - It's like Lego blocks. They get a certain standard blocks, and that's good for us and for customers, because it's all proven technology, it's all tested, it's plug and play," explains Ernst. "But how you link those blocks together, it's up to the customer, and by doing so, we can create this unique set-up."
In this way, Moba's modular approach to egg processing allows each supplier to create a unique egg grading, processing and packaging solution customised to the enterprise's scale, business model and expansion plans.
Moba has sold close to 100 robots during the 1.5 to 2 years time since it started this programme. The company sees huge potential in robotics and automation, as companies are growing ever faster and need systems that can keep up with that pace. This is especially true in Asia, where the layer industry's scale, product mix and technological needs are simultaneously evolving at an exceptionally rapid pace.
Moreover, contrary to general expectations that demand for robots will stem from markets where labour is expensive, automation is gaining interest in the lower wage, fast growing economies of Eastern Europe, Latin America and Asia.
In these emerging markets, a growing base of consumers and their suppliers are changing their mindsets. Despite the low wages found in some developing economies, these days, robots are not merely seen as a means to replace labour, but also a superior method of improving egg quality by producing consistent results.
Essentially, the growing sophistication of emerging market consumers and the need to both expand the scale and variety of egg products justifies automation as much as the relative cost of labour and capital. In fact, Moba has already sold its first robot to China, where labour is relatively inexpensive.
Individual egg handling, customised technical support
With technology, there are always multiple means to solving technical problems, as long as the needs for efficiency, hygiene and return to investments are met. Beyond these, Moba differentiates itself through its service.
At the development stage, all new products are tested with customers in the field with of a team of technicians. The observations and practical results obtained from early prototypes are then incorporated into the final design. In this way, Moba's customers contribute to the design and quality of its product range. Before new machines are operational, egg suppliers' employees are trained at the Moba Technical Training Centre in Barneveld, the Netherlands.
Moreover, technological agility, no matter how impressive, requires service and technical follow-up. In this respect, Moba recognises that even after a machine has been delivered, customers need to be assured that it will be supported for at least the next 10 to 20 years.
Towards this end, Moba despatches about 100 field engineers worldwide to service its customers and ensures that machine parts are always readily available. To ensure high performance and reliability, Moba produces machine parts in-house as far as possible. Its production facilities include an injection moulding plant for plastics and an extensive sheet-metal workshop. It is even able to manufacture its own precision moulds.
Despite the high investment required to meet this level of commitment, this is one of Moba's long-term success driver. "In the end, what counts are the relationships you have with your customers. We have to have a long-term partnership and it is our duty to provide timely and efficient service, and the right service," explains Ernst.
As the needs of new, emerging markets grow in complexity and sophistication, it is increasingly important for Moba to transform its role from a machine manufacturer to a partner. "Ever since six to eight years ago, we were not asked about our expertise on equipment, but about our general capability in helping to design the process - they asked our opinion about how to arrange the flow from the hen houses to the equipment, how to make the best logistics system in the packing station," Buisman relates.
The company also started to see an increase in demand for turnkey solutions. Although it is not difficult for egg producers to buy five individual very good machines in the market these days, the need for efficiency and traceability has driven them to integrate their software. But if integration is not done in a structured, logical manner, the resulting user interfaces become increasingly complicated. Such issues are assuming great importance in rapidly growing, fast changing markets. Their egg processors want a one-stop solution provider that can scale up and streamline production while quickly solving any technical problems.
In response to this, Moba set up a separate structure within the company to handle customers' project management. A project manager is assigned to each project, creating a one-to-one partnership with each individual customer.
The global egg basket
While development, design and manufacturing is centralised in the Netherlands, Moba manages to stay close to its customers in top egg-producing regions either through its own companies or a network of agents. The company is present in Malaysia, Japan, China and Germany, with three regional offices in the large US market.
Today, Asia accounts for over 65% of global egg production. Although egg consumption is relatively higher in North Asian countries such as China, Taiwan, Korea and Japan than other parts of Asia, there remains considerable growth potential, especially in Southeast Asia and India.
In China-the top egg-producing country-where about 24 million tonnes of eggs are produced annually, small-scale backyard family-type operations account for 80% of egg production. With urbanisation and growing affluence, China's demand for sophisticated layer production technology and equipment is expected to grow in tandem with its egg consumption.
Moba's recent campaign in China to explain why egg producers should grade eggs was a huge success. In penetrating new, large fast-growing markets, Moba's approach is to educate and provide information to producers, thus helping them to skip some parts of the learning curve that western companies went through. Many egg producers who are just starting to modernise their operations want to start on the right foot and hence welcome this approach.
Ernst explains that, "Our strategy is being near, making customers aware of what we are doing, not commercially focussing on our equipment, but rather, educating why our business is beneficial to them."
Further south, India is another giant emerging egg-producer in Asia. Despite having the lowest per capita egg consumption in Asia, this gives India's 1.2 billion population unsurpassed potential for market growth. Over the past 10 years, per capita egg consumption in India has doubled from 30 to 60, a figure not to be taken lightly, considering its population of over a billion people. Similarly, in Indonesia and Vietnam, consumption is low but is growing fast.
All these markets need to double their per capita egg consumption to reach western consumption levels. Some, like vegetarian majority India, have both a large population and limited protein intake options, thereby guaranteeing rapid egg demand growth for decades to come.
India, together with Mexico, Brazil and Russia, is gaining pace among the world's top egg-producers. In fact, Moba has had a stable and long period of big projects in Russia. In general, Eastern Europe, Asia and Latin America represent strong growth areas for the company.
But with developing market opportunities comes their rapid pace of change. Not only are global egg equipment suppliers like Moba consolidating, so are the egg supply chains found in rapidly growing economies.
"We used to sell five different machines to five different farms, suddenly they belong to one owner," says Ernst. "It is a general trend. There are fewer customers, but with new markets like Asia and Africa developing, it is quite balanced." As emerging market layer sector consolidation proceeds, it will emphasise egg processing scale, low shell breakage rates and product differentiation based on egg grading, all of which are strong points for Moba.
Machines built for the future
Towards this end, Moba recently started enhanced its offerings with regards to egg processing, breaking and product differentiation. In early 2012, Moba formed Moba Coenraadts when it took over Coenraadts, a manufacturer of egg processing equipment and peripherals. The acquisition strengthened Moba's egg processing capabilities, enabling it to introduce a new generation of egg breakers at the Eurotier 2012 exhibition.
Buisman relates, "Equipment is getting more complicated; customers want all kinds of features and functions, but in the end they want one little button to switch it on and off, it should be simple. So it's a natural thing to combine knowledge, to combine companies." To this end, the company views consolidation from the perspective of being able to provide one-stop solutions to customers; to provide everything they need to be successful.
Currently, in the United States, Europe and Japan, between 30% and 50% of eggs are further processed. However, in China, it is less than 1%. In emerging markets like Asia and Latin America, the proportion of eggs that undergo processing is still low.
But this is something that naturally will expand even faster than the rapidly growing egg markets of fast growing economies themselves. Demand for egg processing-and with it, egg grading-will grow in tandem with consumer food safety concerns, consumption of processed convenience foods and the rise of mass market retailers throughout Asia and Latin America.
Statistics show that egg production is growing at an average of 2.4% annually. For liquid, frozen and powder products, consumption is growing at twice that rate. Especially in emerging economies transitioning to a processed food consumption lifestyle, the breaking and further processing of eggs will enjoy unprecedented growth potential.
Evidently, consumption for the cheapest source of protein is set to grow, be it in shell, frozen or liquid forms. Driven by continuous innovation, offering worldwide technical support and capitalising on the transformation of emerging economies' protein demand, Moba is very much positioned for growth.
All rights reserved. No part of the report may be reproduced without permission from eFeedLink.